Many pundits are proposing government-funded investments as a way out of the current recession. I wonder though, what is there to invest in? Certainly current infrastructure has deteriorated in the past few decades of neglect, but I haven't seen any indications that the deterioration is causing the enormous financial losses that would justify the kind of investment we need. Likewise we've seen in the past year that energy consumption can drop substantially in a relatively short time, with driving down 5.6% in one year. Green energy isn't needed so desperately if consumption declines.
Fundamentally investment is to increase production. But we really don't lack for goods, widgets, or entertainment. The real goal should be to improve lives, and I think at the moment that more time with family and fun is more worthwhile than fancier cars, bigger houses, or smoother roads for faster highway speeds. In an abstract sense, we might be better off with a smaller economy; happier, better connected, and more relaxed.
The problem, as with all major shifts, is that capital and human resources are misallocated for an American form of Dolce Vita. If we have that kind of shift in consumption many investors and workers will be left with no way to make a living. So perhaps the solution, rather than massive capital infrastructure investment, is investment in what we might call "home economics" training - teaching people how to live well and control spending, and how to help others do the same.
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As my other would say, "know you own worth"... Americans have defined themselves, and the American Dream, by their level of material worth and toys - not based on the strength of their family bonds or appreciation of soft goods such as being able to relax and watch a sunset or enjoy a home cooked meal.
Also, you have to consider, the American economy and the means with which capital is rasied is based upon satisfying stock analysts who seem to think that perpetual double digit corporate revenue growth is possible and to be expected. Hence, via the media and advertising industry hired to stoke the fires of irrational consumption, we have been conditioned to think less and consume more - "it's ok, you deserve it, don't worry about the cost" has replaced any notion of good bookkeeping. It's become symbiotic.
I do feel however, that perhaps for the next 5 years, that is being unwound and perhaps we are close to a cultural 'reset' button being hit wherein people will level-set their expectations and self-image with what they actually want as opposed to what they think they should want.
Regarding what do we have to invest in - not all Govt. investment should be for the means of production, it can and should also take into account the betterment of the citizenry - I am talking about eduction. There should be much more stringent rules and oversight of teaching standards. College education is so expensive it's astonishing. The issues of health care are well documented.
I believe in RH Tawney's view that other than a level playing field in education and health, all else is up to the individual. The govt. should invest in making that the case.
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